There is no point in pretending otherwise. When the next catwalk season begins in a month's time, the dishevelled fashion shows of London will not be able to compete with the clout of New York, Milan and Paris. A few years ago, there was a sense that London was becoming of equal importance, but it has now been downgraded in the eyes of the international fashion industry. What was once a vital fashion city is now at best a curiosity.

But a new fringe initiative - a kind of Pop Idol for fashion that is inspired by the energy and daring of the Edinburgh fringe - hopes to plant seeds for a revival in years to come. Conceived by the journalist Colin McDowell, a visiting professor to several UK fashion colleges, the off-schedule scheme has already been ridiculed by the organisers of the official London Fashion Week, the British Fashion Council. The current sniping, which smacks of fear from the BFC that their controlling position is being usurped, does not bode well. It is a sad state of affairs that to provoke any sort of rehabilitation, protagonists are having to go outside the system to try and make things happen.

London Fashion Week has had some great times, like the angry first few shows by Alexander McQueen, or the performance art pieces by Hussein Chalayan staged at Sadler's Wells. Even though both designers have since defected to Paris, their legacy causes some to argue that London shouldn't try to be like the other main fashion cities. Much more interesting to see a three-armed shirt, the thinking goes, than the compromises of bland corporate design that fill most of the international catwalk schedules.

But the politics of fashion change as quickly as the trends. Nowadays, it is abroad, on those corporate catwalks, that the most interesting design statements are made. Since the mid-1990s, the big conglomerates like LVMH (owners of labels like Christian Dior, Louis Vuitton, Givenchy and Celine) and Gucci Group (which controls Gucci, Yves Saint Laurent, Alexander McQueen and Stella McCartney) have become the domineering force in fashion. Surprisingly, the graduates of UK fashion colleges don't rebel against this new status quo. Instead, just to get a decent wage, many sign up to become a part of the mainstream overseas. Our design talent flows freely out of the country to find employment either as the head designer (John Galliano at Dior, Phoebe Philo at Chloe), or as one of the innumerable back-room staffers who churn out the products for the globally recognised brands.

As much as we might want London Fashion Week to be the most inspiring few days during the international calendar, most of the shows leave visitors frustrated with their amateur organisation, poor production values or lack of understanding about what women might actually want to buy. There are some big labels, like Nicole Farhi and Paul Smith, who show in London, but they are more lifestyle brands than envelope-pushing free-thinkers. Worst, many of the young designers in London have given up tapping into youth culture and now just make prohibitively expensive cocktail dresses. All very pretty, but stupifyingly dull and only something that can marginalise London Fashion Week even further as a cottage industry.

It is this sense of youth culture that the talent competition, called London Fringe, will hope to revive. Application forms will be available from next Monday. The entrants will be whittled down to a shortlist of 20, from which four will be picked to take the show on the London Fringe catwalk in September. The eventual winner will be set up with his or her own label. For those who have had to sit through the tedium of recent London fashion weeks, the scheme is an exciting one. The infrastructure behind London Fringe is geared to long-term support and growth for whoever wins the competition. This commitment to the future support is key - there have been many projects in London that have given young designers financial backing on the catwalk, but then left them to fend for themselves in the commercial world. This has meant that many great talents have been forced into bankruptcy and decline.

John Galliano, now heralded as our greatest designer, spent much of the 1980s out of work after his initial backer pulled its support. But a true revival of London Fashion Week could be a long time coming. Finding new designers is all very well, but without adequate or competitive production and manufacturing facilities, labels will still get the clothing made abroad. It is why the other fashion capitals carry a heavier weight - while we trade on ideas, New York, Milan and Paris have a greater sense of genuine industry. Expecting government support is hopeless. In February 2002, Patricia Hewitt announced to much fanfare a study into the problems facing British fashion, but this never held the promise of eventual financial aid. For the proposed London Fringe, or any other scheme, to work in London, a level of consolidated backing is needed to build a genuine success in the city. The BFC should be open to new ideas, not dismissing them out of hand. If it carries on as it is, London Fashion Week will become even more irrelevant. We need to have a shake-up, or we may as well not have London Fashion Week at all.